The present invention relates to a method for maximizing profits when trading securities over the course of at least two trading periods of equal or varying duration. Typically, such methods are encoded onto digital media in an executable form to be executed by a computer processor once various inputs from a user or other sources have been provided.
More particularly, the present invention relates to a method for determining the optimal quantity of units of a security that should be traded during each of at least two trading periods such that the trader's total profit is maximized where, prior to executing a given trade transaction, the trader has accurate information regarding the true value of the securities to be traded, as well as knowledge of both the probabilities that the trader will engage in trade activity during subsequent trading periods and the correction effect that trade activity will exert on the market price of the securities to be traded.